Government is looking to establish and regulate the Tourism Trust Fund under the Tourism Act instead of the Finance Act.
The amendment to the Tourism Act was submitted to the parliament by the ruling People’s National Congress (PNC) lawmaker Ahmed Riyaz.
In addition to the establishment and regulation of the Tourism Trust Fund, the amendment has also proposed changes to the designation of islands, lagoons and land through cross-subsidy tourism development, extension of the period allowed for construction and a clause on temporary closure of tourist establishments for redevelopment.
According to the proposed amendment to the Tourism Act, the President will now be given the authority to designate uninhabited islands and lagoons under the jurisdiction of local councils for tourism development. However, the respective island council will still reserve the right to designate any land on the island for tourism development, according to the amendment.
The proposed amendment to the law has also added a provision on closure of tourist establishments for upgrades or redevelopment. According to the new clause, the lease agreement of the establishment seeking redevelopment must be revised in accordance with the regulations formulated by the Ministry of Tourism and Environment.
The amendment grants the authority to the Ministry to penalise establishments that do not complete the re-development work within the term of the agreement and cancel the lease agreement without compensation.
The Tourism Trust Fund established under this amendment will facilitate the provision of financial assistance to the tourism sector under a two-pronged policy, manage such assistance in good faith, develop the resources of the sector and enhance capacity. The fund will invest in the development of tourism facilities and the deposits to the fund will be invested as permitted by law.
Once the proposed amendment to the Tourism Act is signed into law, the Tourism Fund will be established and the Tourism Industry Trust Fund established under the Finance Act will be abolished.
According to the amendment, sponsorships, both local and foreign, corporate social responsibility contributions from tourism operators and return on investments will go into the trust fund.
Once the fund is established, a trust fund management committee will be formed representing the associations registered with the Ministry of Tourism and the Ministry of Finance. The composition and rules of procedure of the committee shall also be specified in the regulation made under this Act.